Unnecessary Regulations: The Vanguard to Dystopia

By Rich Kozlovich 

Editor's Note:  I published this in 2015, and given all this talk about inflation, I think this is worth publishing again, and especially after yesterday's SOTU, we are in serious need of clarity.   RK

On July 9, 2013 Ryan Young published an article titled, Regulatory Inflation, starting out saying that; “Turns out bad regulations have a rather large side effect.” He goes on to explain the reality of regulations, which also explains why increased taxes of the ‘rich’, and the ‘corporations’ is in reality a hidden tax on the least able to afford increases in the things they buy. He says:

In their book Democracy in Deficit, Nobel-winning economist James Buchanan and co-author Richard Wagner observed that government spending can create inflation “[t]o the extent that resources utilized by government are less productive than resources utilized by the private sector…”The same principle applies to regulation…

Imagine a simplified economy that consists of just two things: 100 dollars and 100 apples, with the price of an apple being one dollar each. If new regulations pass that make it harder to produce apples, the next year there are only 90 apples produced. Their price goes up from $1 to $1.11.

In the real world the ‘rich’ don’t pay taxes - they increase prices. The same is true regarding regulations. It’s all part of the cost of doing business and any business that fails to increase their prices in face of increasing costs due to tax increases or regulations will eventually go out of business. But ultimately all these costs will fall right on to the backs of the poor.

The analysis in this article I liked the best was dealing with EPA regulations regarding energy production. He states;

Here’s an example. Last year [2012], the U.S. Environmental Protection Agency (EPA) issued a rule concerning coal power plant emissions that it estimated would cost about $9.6 billion per year. The only demographic that would receive any potential health benefits from this regulation is truly niche: the unborn children of subsistence-level fisherwomen who consume more than 225 pounds per year of self-caught fish exclusively from 90th percentile most-polluted bodies of inland freshwater. And by the EPA’s own analysis, the biggest benefit is an additional 0.00209 IQ point per fisherwoman’s child. This is literally too small to be measured.

The EPA has never identified any such person, so the rule is almost purely wasteful (its unstated purpose is to give fossil fuels an artificial competitive disadvantage). Since the money supply isn’t reduced to match this wealth reduction, the result is an EPA-induced $9.6 billion reduction in purchasing power among everybody who uses fossil fuels —that is, the entire U.S. economy.

So who benefited from these unnecessary regulations? The so-called alternative energy groups, who can’t begin to match the production of traditional energy producers, but society as a whole suffers another jab at the general welfare of its citizens.

Think of all of the nation’s wealth as a pie. Every time one of these expensive valueless regulations is passed it takes a small slice out of that pie. Remember that this is not an investment that will create more wealth, no matter what EPA directors and green misfits say - these unnecessary regulations - which are growing to the tune of approximately 80,000 pages a year at the federal level eating up two trillion dollars a year of the nation’s wealth.  A  continuing and unending leech on our national economic health.  And the poor suffer the most.

In 1996 the Food Quality Protection Act was passed and the pest control industry lost two categories of pesticides, carbamates and organophosphates. The result? Bed bugs are now a national plague. Who benefited from this? Surprisingly, it was the pest control industry, because the cost of bed bug work skyrocketed right through the atmosphere. As a result I am confronted by angry owners of companies from my industry who don’t want effective old chemistry returned, and resent those who are working toward that end.

Municipalities pass regulations regarding use of pesticides on public property making emotional claims that are misleading and ultimately false. But nonetheless they demand that everyone who provides services to their community must 'go green', or adopt Integrated Pest Management standards. What happens? The costs triple or more. So who benefits? Believe it or not it's the pest control and lawn care people who benefit because their making more money than ever. As a result I am seeing far less resistance to these foolish costly regulations. But who suffers? Society as a whole as this eats away at the pie of common wealth.

As these things continue at some point the nation’s wealth will have been consumed by government and a small corrupt elite. You may wish to read the article 'A Toxic System': Why Austerity Still Isn't Working in Greece – and Austerity Means Cuts, Not More Spending. What brought the Greeks to this nightmare? Over regulation, massive debt, large incompetent bureaucracy, sweetheart deals for major corporations and incompetent leadership.  Sound familiar?

He ends this article with this statement; Perhaps some regulatory deflation is in order. I agree, but that can’t happen as long as the EPA exists and all these other agencies exist. The Interior Department, which supposedly has oversight of the EPA, is rampant with green misfits - as a result nothing will change until the EPA is dismantled.  And it shouldn't end there.  When you see the abuse of American’s rights by the Bureau of Land Management, the U.S. Fish and Wildlife Service and the Army Corp of Engineers - it’s clear they need purged also.